Stem Cell Researchers Face Tighter Scrutiny in Quest for California Millions

Attention stem cell scientists: Want to know who is going to be scrutinizing your budget in your next application for financing from the $3 billion California stem cell agency?

The California Institute for Regenerative Medicine (CIRM), the formal name for the agency, is hiring outside firms to examine the budgets currently being submitted in a $50 million clinical stage award round.  

The two firms that are  being considered have a host of other clients, some of whom might be competitors with California scientists applying for state funding.  CIRM plans to require the experts to self-report any conflicts of interest, basically excusing themselves if such a situation occurs during their work.

It is all part of CIRM 2.0, a radical and ambitious plan to speed funds to researchers and improve quality of applications.  The budget review is a new and critical step for researchers. If their financial plans, including a new financing contingency requirement, do not pass muster, the applications will not even be sent to the agency’s blue-ribbon reviewers.

Here is what the agency says about the budget review,

“An external team of budget professionals will review the proposed budget to provide information to CIRM regarding how the proposed costs compare with established market rates for similar activities (or how well the costs are justified when market rates are not established).

 “When a proposed budget differs significantly from market rates, adjustments to the budget will be required by CIRM prior to further review of the application. Applicants will be notified of the specific discrepancies and applications will not be forwarded for scientific review until an amended budget has been submitted and approved by CIRM.” 

Last month the agency posted a 37-page request for proposals on its Web site. It contained details of how the work is to be performed, budget templates and much more material that offers insights into the agency’s new, CIRM 2.0 thinking. 

The firms that responded to the RFP are Amarex Clinical Research of Germantown, Md., and Integrium Clinical Research of Tustin, Ca.

Integrium said in its proposal,

“Integrium does not have experience in providing the type of service required in the RFP. However, we have many years of experience in which we have internally reviewed budgets that we prepared for our clients.”

 It appears to have offered to review each application’s budget for $2,740 each.­­­­­­­­­

Amarex said,

“Amarex has experience in conducting budget negotiations for services across all types of clinical sites, and knows what appropriate market rates are.  Our clients are both privately funded, and government funded, so we are also aware of the difference in budgeting requirements for both types of clients.”

The Amarex proposal appears to have a cost of $703 for each budget, with expenses such as travel billed to CIRM plus a 10 percent fee.

The agency’s RFP said,

“CIRM anticipates selecting multiple budget review firms pursuant to this RFP and will alternate work among them based on relative expertise in specific areas, timelines, and the avoidance of potential conflicts of interest.”

Both of the firms are well-established organizations and have a considerable history of work with a variety of clinical trials. Their clients are not identified but could be competitors with the organizations that apply for California funding.

The RFP does not speak directly to those sorts of conflicts although it is more specific about financial ties with CIRM employees.  Regarding the budget review consultants, the proposed CIRM contract said,

“The (budget review) firm must be free from actual conflicts of interest not only at the time of selection, but also throughout the term of the contract.”

The agency has a substantial number of outside contractors. On at least one occasion, a conflict has arisen in public. The case was first reported by the California Stem Cell Report in 2012 and involved a “special advisor” to CIRM who was elected to the board of directors of Sangamo, Inc. At the time, Sangamo was the recipient of $5.4 million from the agency as a co-participant on an award. In 2013, the Richmond, Ca., firm received another $6.4 million directly from CIRM. (See here and here for details.)  In January 2014, the firm’s president told CIRM,

“We wouldn't be where we are today without you.” 

The RFP requires that the firms sign a contract that states, 

“The consultant affirms that to the best of his/her knowledge there exists no actual or potential conflict between the consultant's family, business or financial interest and the services provided under this Agreement, and in the event of change in either private interests or service under this Agreement, any question regarding possible conflict of interest which may arise as a result of such change will be raised with CIRM.”

The RFP also states that the firms may be required to “execute” a form 700, a state document that is aimed at disclosing financial conflicts of interest. However, the form is most commonly filed by individuals -- not commercial interests -- and has major limitations in providing full disclosure.

The RFP does not make it clear whether the form 700s would be publicly disclosed or simply held privately by CIRM. However, the agency has never disclosed any reports involving conflicts of interests of its consultants.

Here are the proposals, which are public records, from the two companies.

   Amarex CIRM Budget Prep Proposal January 2015

  

   Integrium Budget Review Proposal for CIRM January 2015

Stem Cell Agency's Lobbyist Now Ranked No. 1 in California

The $3 billion California stem cell agency likes to align itself with the very best science. And as of today it is also hooked up with the best lobbyist in California – at least based on earnings.

CIRM hires many firms to perform work, given its unusual needs, rather than building a large and relatively permanent staff. The tasks of the outside contractors range from publishing the annual report to grant review matters. Today Laurel Rosenhall of The Sacramento Bee reported that one of the firms that CIRM has hired now ranks as the No. 1 lobbyist in California, based on its earnings.

The firm of Nielsen, Merksamer, Parrinello, Gross & Leoni pulled down nearly $5 million during the first three quarters of this year. The firm knocked KP Public Affairs out of the top spot, which it had held for at least the last 10 years.

Nielsen has had a contract with CIRM since its earliest days in 2005, but it doesn't amount to much in the scope of Nielsen's business. According to the latest CIRM report on outside contracting, Nielsen was paid $79,984 during the fiscal year 2010-2011 for services that also extended into the current fiscal year. The report did not list payments for earlier years, but it is our recollection that Nielsen was paid about $50,000 every year since 2005. It is not known whether the firm continues to hold a contract for the current fiscal year.

One of Nielsen's partners, Gene Erbin, was one of the drafters of Prop. 71, the ballot initiative that created the California stem cell agency in 2004. Merck and Pfizer, in addition to CIRM, are among the firm's clients.

CIRM Plans for Lobbyist to Push Patent Reform Position

Shades of Tony Podesta. The other shoe is dropping at the $3 billion California stem cell agency.

This time it comes in the form of open-ended approval for the chairman of the agency to hire federal lobbyists. No details are yet available on the CIRM web site. But on June 9, the directors' Finance Committee will convene for 30 minutes to act on the proposal.

All that is known about the matter at this point is the verbiage in the agenda item:

"Consideration of augmentation of budget of the Office of the Chair to fund, as necessary, contract for federal governmental relations support."

The matter dovetails nicely with the plan to push CIRM into the stormy patent reform battle in Washington.

Some of you may recall that CIRM hired the well-connected, powerful and flamboyant Podesta – he wears red shoes – for $240,000 for 10 months in 2009. (See here, here and here.) Podesta was ultimately paid only $20,077.92, according to a CIRM document. No public explanation has been provided for the difference.

The lobbying effort in 2009, pushed hard by outgoing Chairman Robert Klein, was not without controversy. It made CIRM one of the rare state agencies with its own lobbyist. (See here and here.)

One can only speculate on what will emerge next week. But one would wonder why there is any need to act on the lobbying plan or much less even schedule a meeting on it until a new chairman is elected later this month.

Three Bidders Seek California State Funds for Online Stem Cell Journal

The California stem cell agency is about ready to jump into the publishing business.

The $3 billion, taxpayer-financed enterprise on Monday received three responses to its proposal to spend $600,000 over the next three years to start a new, online stem cell research journal. The enterprises seeking the seed money are AlphaMed Press of Durham, N.C., the International Society for Stem Cell Research (ISSCR) of Deerfield, Ill., and the information conglomerate Elsevier, which is based in Amsterdam.

CIRM wants to kick off a new peer-reviewed, open-access journal to accelerate “the entire field as knowledge is aggregated and shared more readily” and encourage collaboration between stem cell biologists, clinicians and engineers, according to CIRM's plan. (See the RFP below and CIRM President Alan Trounson's proposal here.)

The journal would focus on translational aspects of stem cell science, stem cell-based regenerative medicine and tissue engineering, stem cell-based predictive toxicology and cancer stem cell investigation. The journal would be independent of CIRM but the agency would, “with agreement from the editors,” provide “periodic short articles on translational stem cell research.”

The CIRM seed money would amount to $200,000 a year for three years with the journal becoming self-sustaining at the end of the period. Preference will go to publishers "committed to California-based editorial offices." The award date is scheduled for Jan. 24.

Of the three bidders, the ISSCR seems to have the least publishing experience. It is an international organization of stem cell scientists. The ISSCR web site does not list any publications other than the organization's newsletter. CIRM sponsored its convention last year in San Francisco. Trounson served on its board of directors in 2008.

AlphaMed publishes Stem Cells, which it says “is the oldest journal in the fast-paced area of stem cells and regenerative medicine." The organization added, "Not only is it the first journal to be devoted to this promising research, it remains at the top tier of peer-reviewed monthly journals for this discipline.” Trounson sits on Stem Cells' editorial board.

Elsevier touts “a global community of 7,000 journal editors, 70,000 editorial board members, 300,000 reviewers and 600,000 authors.” It has a publishing tradition that stretches back to 1580 and has been embroiled in the controversy concerning the debate over open access to the research in its publications.

Elsevier publishes Cell Stem Cell and Stem Cell Research, whose editorial board also includes Trounson.

The Public Library of Science, whose international headquarters are within walking distance of CIRM in San Francisco, did not submit a bid. The organization is “a nonprofit organization of scientists and physicians committed to making the world's scientific and medical literature a public resource.” It has a roster of publications ranging from biology to neglected tropical diseases.

We have asked CIRM for copies of the bids submitted by the three groups. We will bring them to you when we receive them.

Here is the CIRM RFP.CIRM RFP for Online Stem Cell Journal

$1 Million Evaluation of Stem Cell Agency Comes Up Next Week

Directors of the California stem cell agency appear ready to commission a $1 million “gold standard” study of its operations with the hope that it will pave the way for voter approval of billions more for stem cell research, perhaps as early as November 2012.

The proposal is scheduled to be voted on at the CIRM board meeting next Wednesday and Thursday meeting at Stanford. However, few details of the latest version of the plan are currently available on the CIRM Web site.

Nonetheless, some information can be gleaned from the transcripts of the directors' Science Subcommittee meetings in May and July, when the proposed study was discussed.

Here is what we have been able to extract. The study would be performed by the prestigous Institute of Medicine(IOM). The cost would be in the $1 million range. CIRM Chairman Robert Klein is proposing that about half of the amount would come from private donors. In July, Klein referred to a 15-month timetable, which might be quite speedy for the Institute of Medicine, which moves slowly, according to the transcripts. If work begins in January, the study could be completed in time for the presidential election in the fall of 2012. Politically speaking, that is the likely to be the best time to seek approval of another multibillion dollar bond measure, given the larger voter turnout in presidential elections. Klein, however, did not mention a specific election timetable.

During the two subcommittee meetings, no CIRM director raised the possibility that the study would identify serious flaws in the agency's $3 billion operation. Klein predicted that the study “would be a solid milestone.”

Jeff Sheehy, chairman of the Science Subcommittee and a communications manager at UC San Francisco, said the IOM would provide a “gold standard objective evaluation.”

Sheehy continued,

“I certainly don't want to go off the board in two years without this report being finished. I don't think I could go to any member of the public, any editorial board, any member of the legislature, the governor, any elected official without some sort of external review of what's gone on with a billion dollars of the taxpayers money, especially in the middle of this horrible recession.”

Sheehy noted that the IOM is less than a household word. In May, he provided this description,

“The Institute of Medicine is an independent nonprofit organization that works outside government to provide unbiased and authoritative advice to decision makers and the public. established in 1870, theIOM is the health arm of the National Academy of Sciences, which was chartered under President Abraham Lincoln. The IOM asks and answers the nation's most pressing questions about health and healthcare. And the aim is to help those in government and the private sector make informed health decisions by providing evidence upon which they can rely.”

During the Science Subcommittee meetings, CIRM directors often referred to the IOM's vaunted independence, which they implicitly did not think would be affected by a $1 million contract. There also was no discussion of limitations that CIRM might impose on the scope of the study before signing a contract. In the case of a current $300,000 contract to assess the economic impact of the agency, CIRM specified that its economic consultants must “execute a vibrant and aggressive strategy” supporting CIRM, a requirement that fundamentally damages the credibility of whatever the their report says.

At subcommittee meeting in July, CIRM Director Philip Pizzo, dean of the Stanford School of Medicine and a member of the Institute of Medicine, said,

“Of any organization that I'm familiar with on a national level, there isn't any other that carries the weight of independence and critical review (of) the IOM and the National Academy of Sciences.”

Klein, who ran the 2004 Prop. 71 campaign that created the organization he now chairs, repeatedly framed the study in the context of a ballot campaign. He said he wanted it “finished in time that the public can analyze it before we go back and put forth the question about whether we're entitled to more bonds.”

Klein did not publicly identify potential donors to help pay for the study. A question could be raised about whether he or others intend to solicit funds from persons who have financial ties to enterprises that would stand to benefit from CIRM funding.

Directors acknowledged that the $1 million price tag appears steep. However, it is a tiny amount when compared to the $6 billion cost (including interest) of the stem cell research effort.

Klein's support for an IOM study seems to be in some contrast to his previous complaints about the amount of scrutiny (audits and otherwise) that CIRM has received from various sources. This spring, the agency also successfully stripped out of pending legislation a requirement that the state controller, who chairs a Prop. 71-created panel to oversee CIRM finances, commission an independent performance audit. Instead, the now CIRM-backed legislation (SB1064) places that audit squarely in the hands of the stem cell agency.

At the July meeting, Klein mentioned a proposal from the IOM. We have asked CIRM for a copy of that document.

Managing More than 300 Grants: CIRM's Thin Ice Question

A key panel of directors of the California stem cell agency on Tuesday will wrestle with ongoing issues involving its critical grants management system and consider changes in its policies concerning the many outside contractors CIRM is forced to rely on.

The agency has already posted some background information for the Governance Subcommittee meeting including a list of current contracts and the proposed changes in contracting. However, still missing is a report on the grants management system, which stirred strong concern from directors at their June meeting.

One director, Michael Friedman, CEO of the City of Hope, warned that CIRM was skating on “thin ice” with its plans to create its own software to monitor and track grants. Friedman said,

“Everybody has seen horrible examples of custom-designed systems that go bad.”

He continued,

“I have to express in the strongest possible terms my discomfort” with the CIRM staff decision to build a custom system.

Friedman's probing led CIRM directors to seek the report on the grants system for next week's meeting. CIRM plans to use the system for the entire grant process from application to termination. CIRM has awarded more than 300 grants involving more than $1 billion. It plans to hand out another $2 billion over the next seven years or so.

The grants management effort has a long history, dating back to 2007 when directors were told it would cost only $757,000. By our count, the agency has spent $1.2 million so far, not including staff time, with much more coming this year. CIRM has not publicly provided its own total nor has it forecast how much more will needed to be spent until the system is fully developed. Also missing are projected annual maintenance and service costs following that point.

For the current fiscal year, the CIRM budget forecasts that spending on information technology will jump by 53 percent, from $817,000 to $1.2 million, an increase of about $433,000. Most of that goes for the grant system.

Also on tap Tuesday are unspecified changes in the bylaws for the CIRM governing board.

Tuesday's meeting will have teleconference locations in San Francisco, Los Angeles, Sacramento, La Jolla, Irvine and Palo Alto. If you would like to attend any of those sessions, you should check the agenda for specific addresses. In some cases, you will need to call CIRM because it has not provided enough information on the agenda to let the public know exactly where the meetings will be held.

CIRM's New Interim VP for Research Takes Job with San Diego Firm

Only a little more than a month into his $250,000, six-month contract with CIRM, Alan Lewis has taken a job as CEO of the Ambit Biosciences of San Diego.

An anonymous reader alerted us this morning to Lewis' new post. (See the reader's comment to the left of this item under the heading “recent comments” or via the comments function on the “$250,000 Contract” item.) The reader makes the reasonable assumption that Lewis, former head of Novocell, will no longer be working part-time with the California stem cell agency. However, the full press release on Lewis' sort-of-new job does not mention the CIRM contract. We are asking both Lewis and the stem cell agency to clarify his status.

Lewis has served as executive chairman of Ambit since March, a fact not mentioned by CIRM when it announced his appointment as interim vice president of research and development. (Lewis told us that his executive chairmanship began in May. Today's Ambit news release says March.)

The anonymous reader also makes a good point concerning the amounts paid to CIRM contractors. The best talent costs money. But failing to effectively manage a $3 billion investment costs a lot more. Also readers should understand that the figures paid to independent contractors should be discounted by 35 to 50 percent if they are to be compared to conventional salaries. Standard pay figures do not include the cost of fringe benefits paid by employers, such as health insurance, retirement contributions, Social Security payments, etc. Depending on the company or government, those fringe benefits can run to 35 to 50 percent. In the case of individual contractors with CIRM, they must pay for those benefits themselves.

But regardless of the justification for spending large sums for outside contractors, California voters can be outraged by the amounts. Their reaction is visceral and emotional, a phenomena we discussed in this item. You can see examples of it on this blog on items dealing with salaries at CIRM and some outside contracts.

We also want to extend our personal thanks to the anonymous reader who brought Lewis' new job to our attention and that of our readers. We encourage comments from all readers, especially those bring fresh information to California stem cell matters.

CIRM Seeks Communications Coordinator

The California stem cell agency is still looking for a “communications outreach coordinator” to help beef up its public relations efforts.

The agency has re-posted the RFP for the $85,000, 12-month job after apparently not being satisfied with the earlier round of applicants. The part-time position also includes a $10,000 travel budget. The winning applicant will be expected to work 20 to 30 hours a week.

Among the responsibilities for the position are three CIRM town forums, Stem Cell Awareness Day, relations with patient advocacy groups and assistance in developing material for use in advocacy group meetings.

Deadline for applications is July 30.

$250,000, Six-Month Contract for CIRM's Lewis

The new interim vice president for research and development at the California stem cell agency holds a $250,000, six-month contract that calls for him to push hard to develop clinical applications that CIRM hopes will demonstrate the success of its $3 billion effort.

The hiring -- as a consultant -- of Alan Lewis (at right), onetime head of ViaCyte, Inc. of San Diego (formerly Novocell) and the Juvenile Diabetes Research Foundation,  brings at least a temporary halt to the search to fill the new VP post that was created after Marie Csete resigned suddenly as chief scientific officer. The CIRM Web site no longer lists the VP position as available.

CIRM President Alan Trounson sought unsuccessfully for a nearly a year to fill the job. This spring he appeared to have run afoul of resistance to his plans for compensation for the post, which would normally top out at $332,000 annually if the position were filled by a regular CIRM employee.

Under the terms of Lewis' contract, he is expected to work about 24 hours a week and meet with CIRM officials at least once a week at the agency's San Francisco headquarters. (CIRM provided an unsigned copy of the contract, which is a public document, at the request of the California Stem Cell Report.)

Lewis is the third top executive of CIRM to be working on a part-time, paid basis. The others are CIRM Chairman Robert Klein, who receives $150,000 for half-time work, and co-Vice Chairman Art Torres, who is paid $225,000 for four days a week. By way of contrast, CIRM President Alan Trounson receives $490,008 annually for fulltime work.

Lewis' agreement runs from June 21 through the end of this year at a rate of $2,500 a day, “with pro-ration (sic) for less than four hours.” The contract is capped at $250,000 not including travel expenses.

On June 23, Trounson told the CIRM governing board that Lewis would be serving as a consultant two or three days a week "to help us with the clinical, preclinical programs." Trounson did not mention that Lewis would carry the title of interim vice president for research and development nor did he mention the size of the contract. If it had been above $250,000, it would have required director approval.   

Lewis is expected to travel widely and possibly internationally. Trips from his home in Solana Beach near San Diego in Southern California to CIRM's headquarters will be paid for by CIRM.

Lewis has had a long business career, which raises questions about possible conflicts of interest. In addition to Novocell, he worked for Signal Pharmaceuticals and Celgene in the San Diego area. He left Novocell in 2008 to work for the diabetes group. The CIRM contract said Lewis affirmed that “there exists no actual or potential conflict between the consultant's family, business or financial interest and the services provided under this agreement.”

ViaCyte is the recipient of more than $26 million in awards from CIRM.

Lewis must file a statement of economic interests that is required of most state officials. We have asked CIRM for a copy of that document.

Here is how the contract describes Lewis' responsibilities:

“• Consult Senior Management on biotechnology, pharmaceutical and investment sectors to enable and enhance the development of clinical applications in CIRM’s scientific portfolio.
“• Consult on the preclinical and clinical development phases of CIRM’s programs and projects involving not-for-profit and for-profit teams, including assembling and working closely with CIRM advisory committees to provide oversight of these programs and make go/no go recommendations to the President for continuation of CIRM support.
“• Work in close collaboration with the Executive Director of Scientific Activities.
“• Integrate basic discoveries where possible into the translational and preclinical pipeline and identifies gaps in CIRM’s scientific program for delivery of cell therapies and related products.
“• Develop and implements strategies to aid clinical applications such as in the critical areas of manufacturing, drug and cell product safety and efficacy.
“• Consult Senior Management regarding interface approaches with national and international regulatory organizations”

The contract differs somewhat from the CIRM news release on Lewis. It said that he would “take direction” from the executive director of scientific affairs – not work in collaboration. This is of significance because their duties overlap and could be a source of friction if not carefully managed.

(Photo from San Diego Union-Tribune)

(Editor's note: An earlier version of this item incorrectly said that Lewis' contract was not mentioned by Trounson at the June CIRM board meeting.)

Former Novocell/JDRF Chief Hooking Up With CIRM

Alan Lewis, the fomer head of Novocell (now ViaCyte, Inc.) and the Juvenile Diabetes Research Foundation, will be joining the $3 billion California stem cell agency shortly, the California Stem Cell Report has learned.

It is not clear what his responsibilities will include or whether he will be serving as a consultant or on staff. The agency has been seeking a vice president for research and development for nearly a year.

CIRM President Alan Trounson created the vice president's position after Marie Csete resigned abruptly as CIRM's chief scientific officer about 12 months ago. Trounson said he would not fill the post of chief scientific officer. Instead, Trounson came up with the new VP position and said he would seek someone with industry experience. He seemed to have a candidate ready this spring. The CIRM board convened closed-door meetings to discuss compensation for the post, but the sessions ended with no announcement.

Lewis, however, could be filling another position either on staff or as an outside consultant. Lewis resigned as head of JDRF in May for personal reasons. He said he would be returning to Southern California to be with his family.

He joined JDRF in January 2010. He served as president of Novocell from 2006 until he left for the foundation. CIRM Chairman Robert Klein has also been involved in juvenile diabetes issues and was recognized in 2006 as “public service leader of the year” by JDRF. After Lewis left Novocell, it received a $20 million loan from the agency. ViaCyte/Novocell has received four awards from CIRM for a total of $26.3 million.

We queried CIRM concerning Lewis. The agency was noncommital. Lewis could not be reached for comment.

Remcho Up for 30 Percent Hike at CIRM; Contracting Changes Also on Table

Directors of the California stem cell agency are being asked this week to approve a 30 percent, $150,000 annual increase in payments to its longtime outside legal counsel, who gives advice on everything from the performance evaluation of the CIRM chairman to pregnancy leave.

The contract with Remcho, Johansen & Purcell of San Leandro, Ca., comes before CIRM directors Wednesday and Thursday at their meeting in the Los Angeles area.

Also on the agenda are revisions in the agency's policies for the outside contractors that are absolutely essential to CIRM's operation. Contracts with outside enterprises total roughly $3 million. Their expenses are the second largest item in CIRM's operational budget.

Documents detailing the Remcho and contract policy moves were posted on the CIRM Web site on Friday, only two business days before the CIRM board meeting.

In the case of Remcho, its man at CIRM is James Harrison, who worked with CIRM Chairman Robert Klein during the Prop. 71 campaign that created CIRM in 2004. Klein, Harrison and a few others wrote the ballot initiative.

Remcho was hired in a no-bid contract after the election. Klein has said that arrangement was approved by the state attorney general because of the specialized nature of Prop. 71.

Remcho currently has a two-year, $1 million contract with CIRM that ends this June. Directors are being asked to add $150,000 this year to the contract and approve a new one for 2010-2011 for $475,000.

CIRM staff prepared a three-page memo detailing the scope of Remcho's work, which includes virtually every piece of the CIRM pie: its finances, $500 million loan biotech industry loan program, contract negotiations, performance evaluation of the chairman and president, preparation of RFAs, contracting policies, legislation and even creation of a pregnancy leave policy.

The memo, however, did not state a reason for the $150,000 increase this year for Remcho nor did it say whether the hike was for work already performed.

Remcho bills CIRM at a rate of $350 an hour for work by its partners and $265 for associates, which CIRM says is significantly discounted. The contract would amount to about 3,100 hours for one partner, roughly a year-and-a-half of fulltime work, assuming a 40-hour week and two weeks vacation.

Directors are additionally being asked to alter their existing contracting policies in a manner that would remove some contracts from their normal oversight. Under the proposed changes, Remcho's contract and others below $600,000 for any single year would not have to be approved by the CIRM board.

New policy language would state:

“When a contract has a duration greater than 12 months, the approval threshold shall be based on the contract amount authorized for the initial year and separately for each subsequent year.”

No justification for the addition of the language was presented by CIRM staff, but it would clarify some ambiguities. It would also give the staff far greater leeway in executing contracts and avoid coming to the board with matters that could be controversial.

Board approval would be required only when the amount of the contract “is expected” to be more than $600,000, instead of the current $500,000. Approval of the directors' Governance Subcommittee would be required when the contract is likely to be more than $300,000 instead of $250,000.

Our take? Harrison performs admirably for CIRM. He is more than competent and nearly unflappable. But the arrangements that led to Remcho's close ties to CIRM, totally acceptable in the world of business, raise persistent concerns involving fairness to other law firms that might bridle at suggestions that they could not perform the lucrative work as well as Remcho. It may be impossible, for all practical purposes, to open the work to others, but directors should recognize the perception problems the contract presents.

As for the changes that would remove some contracts from the directors' approval, they should be rejected. CIRM's unusual dependency on outside help in a business and academic world of competitive secrets plus its need to monitor more than $1 billion in research requires careful and regular oversight by directors.

CIRM Directors to Hand Out $30 Million and Wrestle with Contracting Policies

Directors of the California stem cell agency meet next Wednesday and Thursday in the Los Angeles area to give away more than $30 million and to make undisclosed changes in its policies for outside contracting, which now run roughly $3 million annually.

CIRM, which is limited by law to only 50 employees, is heavily dependent on outside contractors for everything from public relations to legal advice to federal lobbying. Outside contracts are the second largest item in CIRM's operational budget, behind only its salaries and benefits.

The outside work includes such sensitive matters as computer systems and programs involving proprietary information from grant applicants and recipients and oversight of their performance.

The agenda for next week's meeting contains no information on exactly what contracting changes are being proposed. That is in keeping with CIRM's de facto policy of withholding such details from the public until it is too late for interested parties to comment in a timely fashion. With only three business days remaining before the meeting, CIRM Chairman Robert Klein has released only six words on the proposed changes: “consideration of amendments to contract policy.”

In a related matter, the board will consider the agency's contract with Remcho, Johansen and Purcell of San Leandro, which has served as its primary legal adviser since 2005. Currently it has a two-year, $1 million contract that is scheduled to expire at the end of June. CIRM also withheld information on the Remcho agenda item.

As far as grants go, the board is scheduled to hand out a budgeted $30 million for “basic biology” research and another undisclosed amount for CIRM “research leadership awards.” The latter program is new and is budgeted for $44 million over two years with grants as high as $4.5 million each. The purpose of the program is to assist institutions in luring “paradigm-shifting” scientists to California.

The basic biology round is aimed at both business and nonprofit applicants, including proposals with Japanese collaborators.

Here is a link to scores on all the biology grants to be considered next week along with summaries of reviewer comments, although the directors' agenda does not provide a link to the information. (Review summaries could not be found on the CIRM Web site for the researcher recruitment grants.)

Reviewers approved 14 biology grants, including a $1.4 million application with a score of 66. That grant was slotted for approval despite having a lower score than two other grants that scored ahead of it with 71 and 69.

The directors have final legal authority on approval but almost never overturn a favorable decision by scientific reviewers, who operate behind closed doors and do not have to disclose publicly their economic and professional interests.

Concerning the grant with the 66 score, the CIRM review summary said,

“The reviewers acknowledged that the PI is a strong leader in his/her field with an outstanding publication record in high impact journals. They did note, however, a limited experience with hESC or iPSC. While they appreciated the complementary expertise of the collaborators, the reviewers were puzzled by what they perceived to be a lack of engagement with the local community of stem cell scientists at the applicant's institution. The research environment and facilities were considered excellent.”

Under the “programmatic review” section of the summary, CIRM indicated the rationale for approval. CIRM said,

“A reviewer reasoned that this proposal fills a programmatic need in the area of hematopoiesis for CIRM. Though the application was judged risky, the proposal was felt to represent a scientific direction with great potential. The review panel discerned that the benefits of studying RUNX1 in humans warranted the risks and outweighed the concerns over feasibility.”

One scientific reviewer did not participate in the decision because of a publicly undisclosed conflict of interest. He is Ali Brivanlou of the Rockefeller University. The grant review group includes members of the CIRM board who also may vote during the group's review process.

Significantly not on the agenda is an item dealing with compensation for a new vice president of research and development, whom the agency has been seeking since last summer. The matter has been on the table for several past meetings. The absence this time could mean that no further discussion of the matter is required since a person has been hired. If so, look for an announcement next week.

CIRM directors are also expected to seek to stifle the latest legislative attempts to reform CIRM operations, improve its transparency and ensure affordable access to taxpayer-financed therapies. Their strategy is to have the measure, SB1064, sent to interim study, which would shunt the effort aside for a year or so.

The board meeting will be available via the Internet(audio only). The Wednesday meeting will take place in Monrovia at the Doubletree Hotel and Thursday at the City of Hope in Duarte. Instructions for logging into the audiocast can be found on the agenda. If you want to follow the discussion, you may want to have a copy of the agenda and any background material handy for reference.

CIRM Issues for 2010: From Klein to Cash Flow to Conflicts

Money, manpower and performance – all are some of the top issues facing the $3 billion California stem cell agency in 2010.

They are not the only major issues confronting the 29 men and women who – as its directors – are charged with giving away the cash and ensuring that the California Institute for Regenerative Medicine stays on course.

But all the challenges will surface more or less prominently during the coming year. Here is a quick overview of the situation.

Leadership

CIRM Chairman Robert Klein says he is leaving in 12 months. The Palo Alto real estate investment banker has been the guiding spirit behind the agency since it was a mere gleam in the eyes of the supporters of hESC research. Today he is the dominant force at the agency, almost completely setting its course on its financing with state bonds, the agency's only real source of income. His planned departure will leave a huge gap, for better or worse. It is one that CIRM directors need to address publicly and soon, perhaps by appointing a task force out of their governance and finance subcommittees. Obviously much of the replacement discussion is too sensitive for public airing. But steps should be taken by CIRM to assure the public, business, researchers and other interested parties that the agency will function smoothly -- financially and otherwise -- regardless of who is chairman. Klein once proposed hiring a high-level bond/finance person to help replace his expertise. That opening has not been posted, but a search should begin promptly because of its likely prolonged length. Plus the person should be on board by around next June.

Contracting

Careful management of the outside contractors is already critical and will become increasingly so as the agency moves forward. The 50-person cap on staff has made the agency unable to operate without spending $3 million a year for outside help. In the next several years, CIRM may well bump up against the percentage budget cap in Prop. 71 as well, as the agency uses more contractors. CIRM is shy in dealing publicly with such issues. However, many businesses go through long-term staff planning to avoid being blindsided financially. It would behoove the agency to project publicly its needs for outside contractors for the next five years. Of course, such plans are subject to major modification but do help to provide a better picture of future needs. Related to the contracting is electronic security. This topic has rarely, if ever, come up publicly with directors. CIRM has approved grants for more than 300 researchers. It has large amounts of confidential information to protect, with more to come. The disease team round and additional ones with commercial potential are likely to generate information that has significant economic value. Hacking the data may well be financially profitable. But one way to gain access to confidential data is through an employee with an outside contractor, which is sometimes done with financial information on Wall Street. The financial interests of contractors, especially related to their other clients, and their employees should be carefully scrutinized, although this is only a partial answer. Someone at CIRM, but more likely a specialized security contractor, should scrutinize all software, especially the custom programs, for holes and backdoor access.

CIRM staff

President Alan Trounson last week announced that he needs to hire more persons than is permitted under the terms of Prop. 71. He warned that CIRM does not want to get in a position where it cannot fulfill its responsibilities. Ordinarily this would not be an issue. But the agency is hamstrung by the 50-person cap on its staff, which can only be changed by 70 percent vote of the legislature. Asking the legislature to modify Prop. 71 may well stimulate the desires of lawmakers for other changes at CIRM, including some recommended by the Little Hoover Commission, the state's government efficiency group. CIRM has adamantly opposed any changes in its operations. Negotiating any legislative changes successfully will require considerable skill and a public image for CIRM that makes it less vulnerable to criticism.

Cash flow

CIRM directors received a nasty surprise last January when they were suddenly confronted with a cash flow crisis. The problem is now alleviated through June 2011. It is fair to say that the cash flow report should have come earlier and been managed better. Anyone following the California bond situation (not us at the time) could have anticipated the problem in the fall of 2008, if not earlier. Klein did, but balked at being forthright with directors at a meeting at the time when some asked questions that would have led to a discussion of the issue. Authorization and timing of bond sales needs long-term planning as well, given the state's fiscal plight, particularly since Klein is leaving in a year.

Openness/conflicts

The conflicts of interest are not going to go away at CIRM. They are built into the organization by Prop. 71. As an important sign that CIRM is aware of the issue and not trying to sweep the conflicts under a rug, it should make its statements of economic interests and travel expenses available in a searchable form on the Internet. Gov. Arnold Schwarzenegger already does this for his top officials. If CIRM follows his example, it will go a long way in dealing with criticism that CIRM is an entity that only serves the interests of the employers of its directors. Internet access to the statements of economic interest is also important as CIRM becomes increasingly friendly to the biotech industry. Statements of economic and professional interests of scientific reviewers should be posted. They make the de facto decisions on the grants. Applicants can only appeal their decisions on the basis of a conflict, but applicants do not know which scientists examine their applications, much less their economic interests.

Performance

Sometime in 2010, probably in the summer, CIRM plans to bring in an outside panel of scientists to review its research portfolio. Presumably the group will generate recommendations to fill any voids in CIRM research and to make other improvements. The session could serve as a fine exercise in the directors' new effort to improve its communications with the public. Opening that session to the public would not only enhance CIRM's credibility but it would be useful to scientists and businesses in California interested in seeking CIRM funding. Selection of the panel is important as well and should include someone willing to serve as a scientific devil's advocate. Without that perspective, the review session could degenerate into back-slapping self-congratulation.

CIRM Approves $300,000 More for Tech Help, Including Grant Management

The Governance Subcommittee of the California stem cell agency yesterday approved spending an additional $300,000 for technology assistance as it wrestles with its $1.2 million – and growing – grants management system.

A $100,000 increase was okayed for Turner Consulting Group of Washington, D.C., and a $200,000 extension for 25by7 of Santa Monica, Ca., according to a CIRM spokesman. Turner began work August 2008 on the grants management system under a $120,000 contract. Increases were approved last February and September. With the latest increase, the value of the two-year contract now stands at $350,000. Turner's contract is scheduled to end next June but may well be extended.

25by7's original $175,000 contract for network, server and desktop support began one year ago. Under the action yesterday, the contract was extended for one year, bringing its two year total to $375,000.

CIRM expects to seek additional information technology help next year.

The directors subcommittee also heard a report on the system designed to oversee $3 billion in grants and loans. It was first public accounting of how much has been spent on the grant management system, which CIRM has described as "a risk." No details were available concerning directors' comments.

How to Handle Pesky Media Types

What do you do when a cranky reporter comes calling and asks questions you do not want to answer or cannot?

One prospective contractor with the California stem cell agency today provided a fine example of how to deal with such a situation. We are offering it as a model that can be used by scientists, government officials and business men and women alike.

After we posted our item today involving Turner Consulting Group of Washington, D.C., we emailed a note to the firm, alerting it to the piece and asking two questions about the size of the proposed contract with CIRM and the nature of the work, none of which CIRM has yet disclosed.

Here is the verbatim response from David Cassidy, vice president of the firm:

“Hello David,

“Thank you for your e-mail, and for mentioning us in your blog. We are avid bloggers ourselves; feel free to browse http://blog.tcg.com if you haven't already!

“Your questions regarding CIRM are best addressed by that agency, if you'd like to invite them to do so.

“By the way, you may be interested to know that our very latest figures (yet to be published) show that we've saved the federal government $199 million. Our goal is to save US taxpayers $1 BILLION by 2016, by supporting our government clients with superior technology and management consulting services.

“Thanks,
“Dave”

Cassidy did not answer our questions, but he delivered a response that served the best interests of his company, deferring to CIRM, which probably will wind up paying Turner a lot of money.

Cassidy acted within hours of the initial query, which is very important in an era when information moves at cyberspace speed. Prompt response is especially important with mainstream media, which is constantly producing a product for Web sites that change hourly in addition to the normal print and broadcast efforts. Failure to respond and late responses mean unanswered questions in a reader's mind, often reflectively unfavorably on an organization.

Cassidy's email was polite, reflecting a personal, professional and organizational confidence that would be likely to accrue to Turner's benefit.

Finally, Cassidy threw out some diversionary meat, a tactic that helps throw the running dogs of the media off the scent. His email contained two pieces of fresh – and fresh is important – information (Turner's blog and the $199 million cost savings). Even if the new material does not make it into print, questioning media types often find such stuff palliative.

Our query could have been handled reasonably in other ways as well. But Turner's response more than filled the bill, given that it wisely deferred to CIRM, and creates a benign foundation on which to build.

CIRM Directors to Discuss Agency's Management of $1 Billion in Grants

A panel of directors of the California stem cell agency is slated to be briefed early next month on the “at risk” system that it uses to oversee more than $1 billion in grants to more than 300 California scientists.

In June, CIRM staff warned that the grant management system was troubled. Its complete costs have not been reported publicly although directors were told in 2007 that the amount would be no more than $757,000. CIRM has since severed its contract with the original contractor and hired additional consulting and technology help.

Grant management and others issues related to CIRM's information technology are on the agenda of the Governance Subcommittee of the agency's board of directors on Dec. 2. The information posted on the agency's Web site is skimpy at this point, but hopefully will be supplemented before the long Thanksgiving weekend.

Also to be considered is the addition of Turner Consulting Group and 25by7 to CIRM's outside contractors, who together account for the second largest category of spending, $3.1 million, in the agency's operational budget. CIRM must rely on non-state employees because of the 50-person cap on its staff, a limit that is embedded in state law by Prop. 71, which created CIRM.

The 25by7 firm is appears to be a technology support business with operations in San Jose, Santa Monica, Los Angeles and New York. The one-sentence item on the CIRM agenda says directors will be asked to approve a contract with 25by7 for network, server and desktop services. No value for the contract was available on the CIRM Web site.

Also up for approval is a contract with Turner, again with no value specified. No details were provided on the nature of Turner's work nor was it identified beyond its name. Turner may well be the Washington, D.C., information technology firm that says that it saved the government more than $166 million through its work, which includes grants management. Its clients include the NIH, the National Science Foundation and the USDA.

The Governance meeting will be available for public participation at a number of locations throughout the state. Specific addresses can be found on the agenda.

CIRM Releases Bank Info That It Once Withheld

The California stem cell agency late today released information on a $250,000 contract with Square 1 bank that the agency previously had refused to disclose at the request of Square 1.

The move was prompted by inquiries from the California Stem Cell Report about the withholding of the information, which is public record and should have been released earlier.

Don Gibbons, chief communications officer for CIRM, said in an email,

“After your inquiry, we contacted Square 1 to see if they would reconsider their request to treat the pricing information as confidential, in the interest of public disclosure. Square 1 has agreed that we should produce an unredacted copy of attachment B to the contract, but they would like to note that they sought to protect the pricing information because they do regard it as proprietary (i.e., it is not known to their competitors and could give them a competitive advantage), but that they will waive their objection to producing the information in the interests of transparency. The unredacted document is attached.

“CIRM staff initially redacted the pricing information at Square 1’s request, but we remain responsible for deciding whether to honor such requests. We could have asked Square 1 to waive its request before we produced the document. In retrospect, we should have slowed down and taken the time to do that.”

CIRM is to be commended for pushing forward with its effort to release the information. Square 1 did the right thing as well, even though it contends the information should be proprietary. We wrote earlier about the implications for CIRM in connection with failing to comply with state public record law.

John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., was harshly criticial of the earlier censorship of the Square 1 contract. Following the release of the information, he said,

“I'm glad CIRM is doing the right thing. I hope the staff learns something from this experience.”

One of the downsides for many businesses in dealing with the state is that it does require disclosure of information that many business would like to keep out of the public gaze. But there can be great benefits as well. In the case of Square 1, this initial contract gives it a leg up on competitors in terms of securing much a more lucrative, long-term contract with CIRM for its fledgling, $500 million biotech loan program.

The current contract will serve as a baseline for future arrangements. Square 1 and CIRM staff will be working together to smooth out the process and build relationships that will be valuable in the future. The linkage between Square 1 and the $3 billion stem cell agency, the world's largest source of funding for human embryonic stem cell research, will also enhance the bank's prestige and ability to secure additional profitable business.

It is also likely that the fee structure, as now disclosed by CIRM, will be modified in future arrangements, which will require a new, public bidding process.

The redacted contract can be found here. The newly released information can be found here.

CIRM's Openness Failures Raise Broader Questions

The chairman of the California stem cell agency, Robert Klein, frequently is given to declaring that the $3 billion research effort adheres to the highest standards of openness and transparency.

Recently, however, the agency has had difficulty even complying with the basic state public records law and the state Constitution's public access guarantees, much less achieving a higher level of performance.

The specific instances are relatively minor, but they raise important questions concerning the conduct of the public's business. How is CIRM, which cannot operate without outside contractors, overseeing their efforts? Is CIRM becoming too cozy with industry? And how can CIRM maintain its credibility unless it is forthright about its affairs?

One longtime CIRM observer, John M. Simpson, stem cell project director of Consumer Watchdog of Santa Monica, Ca., described as “outrageous” CIRM's most recent failure to comply with the open records law.

In response to a query, he said,

"CIRM's lawyers need to learn who their client is when they are employed at a public agency. It's the citizens of California, not vested special interests."

The two most recent cases involving CIRM's failure to comply with state public records law both concern contracts with private firms. The first is a $100,000 contract with Levin & Co., of Boston, Mass., to help search for candidates for the position of vice president for research and development. The second involves a $250,000 contract with Square One Bank to conduct a financial review of Novocell, which was approved for a $20 million loan by CIRM directors last month.

In the case of Levin, the censored material involved 16 pieces of information including its legal business name, address, whether it is a partnership or corporation, name of the person signing the document and his or her title along with his signature and date of the signing. Even the names of those categories were blacked out.

(See page 14 of the contract for a look at the redaction. A blank copy of the state form involved can be found here.

Previously CIRM had posted such information for other companies voluntarily on its Web site, so we had assumed that the redactions were a mistake and consequently did not write about the matter. (After we questioned the redaction, CIRM ultimately provided the material it had chosen to withhold.)

Then came the response to our Oct. 16 request for a copy of the contract with Square One bank. It was another relatively routine matter, although it involves the start-up stages of a $500 million biotech loan program that is expected to have default rates up to 50 percent.

The copy of the contract showed that it was capped at $250,000, but that information had been reported earlier. Censored was the following information: underwriting fee to be paid per loan, annual service fee, warrant administration fee and the legal fee to be paid by CIRM to Square One

Such information is public record and commonly disclosed by state agencies. Otherwise, invoices to CIRM and payments by the agency containing that information would be cloaked in secrecy.

On Nov. 8, we asked CIRM for the legal justification for not providing the Square One fee information. Yesterday (Nov. 16), Don Gibbons, chief communications officer for CIRM, replied with one sentence,

“From our legal team: The redactions were made at the request of Square 1 Bank, based on its determination that the fee structure is confidential and proprietary.“

In response, we emailed Gibbons,

“I assume that your response ...means that the lawyers agree that the material is confidential under state law. It does not directly say that, however. Please let me know if CIRM lawyers think otherwise.”

Gibbons' complete reply:

“We let all contractors make initial decisions on what is proprietary. Square One made the decision that the structure of their fees, not the ultimate amount paid, was proprietary. In the interest of transparency, we have asked them to reconsider that decision.”

As of this writing, we have received no further response from Gibbons. Also yesterday, we asked Square One about its justification for censoring the information, but have received no response. (We will carry its response verbatim if we receive one.)

As Consumer Watchdog's Simpson indicated earlier, CIRM's actions raise questions about the management of its outside contractors, which are essential to the agency's operations. CIRM would cease to function without its outside help. It is restricted by an ill-considered provision in Prop. 71 to only 50 employees. Currently the cost of contracting is the second largest item ($3.1 million) in its operational budget, just behind salaries and benefits.

In the case of Square One, CIRM's attorneys should have told the firm that its request did not comply with state law. CIRM should have then released the entire document. In our case, we have had decades of experience with public record law and can generally tell when there is a flagrant violation. But other members of the public are likely to accept whatever CIRM, driven by desires of its suppliers, deigns to pass along.

The contracts signed by Levin and Square One are state documents. CIRM is required by law to determine what is public or confidential, not the outside contractors. Certainly they can and should be consulted, but their wishes must not be blindly followed. To do so is to open CIRM to unnecessary legal challenges by foes of stem cell research.

Failure to be forthright also raises questions about other areas of CIRM that bear attention, such as the problems with the software that is critical to the oversight of what is now a $1 billion grant portfolio along with the $250,000 federal lobbying contract with Tony Podesta, also heavily censored and we suspect unnecessarily so.

Managing outside contractors has always been difficult for government, both at the state and national levels. The stories of abuses are legion, whether it is a Defense Department boondoggle or fouled up databases at the state Department of Motor Vehicles. CIRM must make it clear to its contractors that the agency's needs must be met and that the interests of the taxpayers do not necessarily coincide with those of the contractors.

California Courts and CIRM: Both Troubled by Technology Problems

The Sacramento Bee today carried an instructive piece that has implications for governmental enterprises that engage in major outside contracting and need complex computerized systems to monitor data and dollars.

That includes the California's $3 billion stem cell research effort. CIRM would be out of business without its outside contractors, which it is compelled to use because of a legal cap of 50 on staff size. The agency is also wrestling with a computer system to monitor the performance of its grantees and manage its multi-year grants, which will total nearly $1 billion by the end of this week.

The Bee's article by Robert Lewis is a fine piece of investigative reporting. Lewis chronicled the ins-and-outs of an effort to computerize the state's court system. The project began in 2001 and now faces costs close to $2 billion, but it is years away from completion.

The original cost projections appear to be unknown. The Bee quotes a court spokesman as saying costs estimates “at junctures where critical decisions were made” do not exist. How much has been spent so far? Court officials could not provide an answer.

Lewis' article notes that the state court project ballooned without the scrutiny that other state computer systems face. That's because the courts are an independent branch of government. CIRM is not an independent branch of government, but it receives even less normal state oversight, which usually comes from either the governor or the legislature.

Lewis does not identify a particular point where the the state court effort went wrong, although the court system severed ties with one major contractor in midstream. The project seems to have grown willy-nilly with differing goals, lack of a cohesive plan and huge no-bid contracts. Court officials also apparently ignored advice that called for a “business case” justification that would spell out the project's objectives.

CIRM's grant management system is small change compared to the court boondoggle. However, CIRM directors were told this year that the critically needed grant managements program is “at risk.”

The history of the CIRM project does not instill confidence. In October 2007, CIRM directors were told that the “complete cost” of the system would be $757,000. By the following spring, CIRM was seeking additional help at a cost of $85,000. By this year, the original contractor, Grantium, no longer was working on the project. Other contractors had been hired, at a cost of more than $350,000. Just last month, CIRM advertised on its site for more programming assistance. CIRM has made no public disclosure of all the costs of the system since the beginning of the Grantium contract.

In July, John Robson, vice president of operations for CIRM, differed with our reports of “disarray” in the grants management system. Robson, who did not join CIRM until after Grantium was selected, said the current system provides all the necessary information but is labor and time intensive. That is not a small consideration given the tiny staff (40 something) at CIRM. Robson also predicted that the current grants management system will save money compared to Grantium.

Robson made his comments to us following a meeting of the CIRM directors' Finance Subcommittee at which they asked for a detailed breakdown of spending on the grants management system. So far, that information has not been forthcoming.

CIRM Panel Approves $300,000 Economic Study; Public Access to Data Still a Question

A subcommittee of the directors of the California stem cell agency today unanimously approved a $300,000 economic impact study of the agency's work by a firm that is expected to “execute a vibrant and aggressive strategy” supporting CIRM.

Still up in the air is whether CIRM will allow other researchers and interested parties access to the basic data that will be gathered for the study at taxpayer expense. Much of the information will come from recipients of CIRM grants.

In response to an email query, Don Gibbons, spokesman for CIRM, said the Governance Subcommittee approved the study to be conducted by LECG of Emeryville, Ca. Gibbons did not respond directly to questions about whether the data would be available to other, non-CIRM researchers, who could make an independent assessment about the financial impact of spending $3 billion for research.

Gibbons looked askance at an earlier item on the California Stem Cell Report that discussed the issue of public availability of the information.

He said in an email that the article was “grabbing at straws.” The item was based on a brief response from Gibbons to two questions from the California Stem Cell Report. Gibbons said that he was “in a hurry” when he looked at our emailed questions and misread them as a request for a copy of a contract. (Our two sentence request can be found here.)

Gibbons added that at the Governance meeting, CIRM Chairman Robert Klein “pledged that the (economic analysis) model created will be made public,” a statement that raised another question from us.

We asked Gibbons,

“To double-check, your message....omits any reference to making the basic data public. The 'model' is different than the data used in it.

“Will the basic data be available to the public and will it be available in a non-proprietary format? Thanks.“

Gibbons' verbatim response:

“The bulk of their work will be on the model. The only case that will be worked through with full data will be the test case on Polycythemia Vera. There will be some data that will be protected by patient privacy laws. We have not worked out where that line will be drawn.”

CIRM's position falls far short of ensuring public and researcher access to the basic data, which is being generated with taxpayer funds. Bringing up patient privacy laws only confuses the issue. In virtually all major studies of this sort, individual names and personal information are not important to the analysis. The data are aggregated in an anonymous fashion.

The important point is to build a database from the very start that is publicly usable and that does not co-mingle confidential and public information in such a way that harms its public accessibility. If the two categories are interwoven inappropriately, it could make the data nearly impossible to unwind.

To fail to ensure public access to the basic information only damages CIRM's credibility, especially when the agency goes to Sacramento seeking additional funding. Klein has promised to adhere to the highest standards of openness. It is time for him to fulfill that promise.

As for the independence of the winning firm, CIRM's request for bids specifically stated that a successful bidder must “execute a vibrant and aggressive strategy to support the goals and initiatives of CIRM.”